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Search Frictions, Credit Constraints andFirm Financed General Training

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  • Christian Holzner

Abstract

This paper shows that in a search model where future employers of trained workers donot benefit from the training in other firms, investment into general training will only be below the competitive level if workers are credit constrained. If workers are credit constrained, then the training firm cannot recover the cost of training since trained workers will search for a better paid job. This does, however, not imply that trainees will benefit from training. Only if the trainee wage is bounded by the workers' credit constraints do trainees gain from training.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-Ifo_Working_Papers/wp-ifo-2005-2010/IfoWorkingPaper-6.pdf
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Bibliographic Info

Paper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Paper No. 6.

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Date of creation: 2005
Date of revision:
Handle: RePEc:ces:ifowps:_6

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Related research

Keywords: General training; credit constraints; search frictions; matching.;

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References

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  1. Stevens, Margaret, 1999. "Should Firms be Required to Pay for Vocational Training?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2099, C.E.P.R. Discussion Papers.
  2. Stevens, Margaret, 1994. "An Investment Model for the Supply of Training by Employers," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 104(424), pages 556-70, May.
  3. Acemoglu, Daron, 1997. "Training and Innovation in an Imperfect Labour Market," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 64(3), pages 445-64, July.
  4. Daron Acemoglu & Jorn-Steffen Pischke, 1998. "The Structure of Wages and Investment in General Training," NBER Working Papers 6357, National Bureau of Economic Research, Inc.
  5. Chang, Chun & Wang, Yijiang, 1996. "Human Capital Investment under Asymmetric Information: The Pigovian Conjecture Revisited," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 14(3), pages 505-19, July.
  6. Muthoo,Abhinay, 1999. "Bargaining Theory with Applications," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521576475.
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Cited by:
  1. Martin Werding, 2005. "Survivor Benefits and the Gender Tax-Gap inPublic Pension SchemesWork Incentives and Options for Reform," Ifo Working Paper Series, Ifo Institute for Economic Research at the University of Munich Ifo Working Paper No. 7, Ifo Institute for Economic Research at the University of Munich.
  2. Alfred Garloff & Anja Kuckulenz, 2006. "Training, Mobility, and Wages: Specific Versus General Human Capital," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 226(1), pages 55-81, January.

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